“We’re not saying that we are the best cell tower lease experts in the United States, we’re just stating the obvious, that we haven’t spoken with any that were smarter.”
Cell Tower Ground Lease Agreements: Get the Expert Help You Need
Cell towers are often located on property that is not owned by tower properties or carriers. These properties are usually secured through ground leases. The landlord leases only certain areas of their property, while the tenant is responsible for the infrastructure and equipment.
Cell tower ground leasing is when you give a portion of your land to a cell tower company, or directly to T-Mobile. They then develop the property for the duration of the lease. The cell tower Lessee or Tenant is responsible for any improvements to the property during the term of the ground lease. This includes the cell tower and any associated structures.
Ground leases are similar to other leases of real estate. Tenants must make regular rent payments, usually monthly. Tower rents in the USA are usually paid monthly. The majority of ground leases are net leases. This means tenants will be responsible for paying for insurance, maintenance costs, and any applicable taxes.
A cell tower ground lease is often longer due to the amount of investment that the company makes by building the tower on the leased land. This is common in the industry. It can last from 20 to 40 years. You should not give too much time to cell tower companies, as this could limit your ability to re-enter or renegotiate the lease later.
After the expiration of a cell tower lease, any improvements made by the cell tower company to the land should either be removed completely or, at the option the landlord, become the property the landlord.
American Tower, Crown Castle, and SBA Communications are the largest cell tower companies in the industry. They have approximately 65-75% of their towers on properties that they acquired through ground leases.
Cell tower companies typically have 20+ year remaining on their leases. However, they don’t let their leases run out of time. Instead, they push for extensions for as long as possible to get the property owner to accept. Or, they may seek a long-term relief in return for a one-time fee to the landlord.
The industry standard for cell tower ground leases is a 25-year term. It can be broken down into five separate terms that automatically renew every 5 years. Property owners have no termination rights. When receiving an offer for a cell tower ground lease, property owners must decide whether they wish to encumber the property for such a prolonged period.
Starting cell tower ground leases start at $500 per month on average. It is difficult to determine the average cell tower lease rate in the United States. For ground leases on single tower carrier towers, existing mature cell tower leases range from $600 per month to $1,500 each month. Ground leases for multi-tenant towers can be between $600 and $3,000 per month or more. Ground leases for mature multi-tenant towers with revenue sharing provisions that are properly negotiated can exceed $10,000 per month.
Cell Tower Ground Leases: How much is my site worth?
When you are approached by someone to build a cell tower on your land, the first question you will ask is what the tower is worth and what rent you should pay to get the tower on your property. Contrary to popular belief lease rates don’t depend on ground elevation or population density. Cell tower rent rates don’t depend on how many antennas are installed. Ground lease rents for cell phones towers are more expensive in urban areas. However, there are some areas that have different lease rates despite being close in terms of population. Although we believe any landowner could network with others to find out what their cell tower leases are worth and get them to tell you, it doesn’t necessarily mean that the sample they have is representative or the true market value of your site. It doesn’t mean you should get the average price for your site. Wireless carriers may prefer your site, and may pay more for it.
When determining the value of a cell tower lease or renegotiating an existing lease for a cell tower, there are many factors to take into consideration. It is important to remember that the bargaining power of the property owner is directly related both to the options available to a cell company and the overall value for the proposed location.
Cell tower ground leases tend to favor the tower company or carrier, but not you if the landowner. They can still be beneficial to both the landlord or tenant if they are structured properly. One party can have access to the land they need to run their network, while the other can use their property to do the same. The property owner can also get steady income based on the utility that the cell tower company receives from its land.
The cell tower companies have experts working for them to secure the best cell tower leases. Why shouldn’t you also have one working for you? Tower Genius is available to assist you at 1-888-313-9750, or by completing the Contact Form.